Brent crude futures were up 27 cents to $73.27 a barrel by 0749 GMT. U.S. West Texas Intermediate crude climbed 26 cents to $69.37.
Both benchmarks gained more than 1% in the previous session after U.S. President Donald Trump announced a 25% tariff on countries importing oil and gas from Venezuela. Oil is Venezuela’s main export, and China, which is already the subject of U.S. tariffs, is its largest buyer.
This move could mean a fairly sizeable tightening in the global oil balance, ING analysts wrote in a note on Tuesday.
They added that oil, along with broader risk assets, also benefited from suggestions that the Trump administration may take a more targeted approach with reciprocal tariffs the U.S. is set to enact on April 2.
“Investors fear Trump’s various tariffs could slow the economy and curb oil demand, but the prospect of tighter U.S. sanctions on Venezuelan and Iranian oil constraining supply, along with his swift policy shifts, make it difficult to take large positions,” said Tsuyoshi Ueno, senior economist at NLI Research Institute.
“We expect WTI to stay around $70 for the rest of the year, with potential seasonal gains as the U.S. and other countries enter the driving season,” he added.
Last week, the U.S. issued new sanctions intended to hit Iranian oil exports.
The Trump administration also on Monday extended a deadline to May 27 for U.S. producer Chevron to wind down operations in Venezuela.
The withdrawal of Chevron’s licence to operate could reduce production in the country by about 200,000 barrels per day, according to ANZ analysts.
Trump also said automobile tariffs are coming soon, even as he indicated that not all of his threatened levies would be imposed on April 2 and that some countries may get breaks, a move Wall Street took as a sign of flexibility on a matter that has roiled markets for weeks.
Meanwhile, OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, will likely stick to its plan to raise oil output for a second consecutive month in May, four sources told Reuters, amid steady oil prices and plans to force some members to reduce pumping to compensate for past overproduction.
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